The move is a part of Nokia's strategy to dispose of its non-core assets.
"Nokia has agreed terms for EQT VI, part of the leading private equity group in Northern Europe, to acquire Vertu, the global leader in luxury mobile phones from Nokia," the company said in a statement.
Nokia said it would retain a minority shareholding of 10 per cent in Vertu.
However, the company has not disclosed financial details of the transaction but according to media reports the deal size could be around USD 250 million.
"This is a logical next step in the evolution of Vertu as the world leader in luxury mobile products," Vertu President Perry Oosting said.
"Since Vertu began in 1998, our business has grown every year, due to the efforts of our talented workforce and the unique products and services we offer to our customers. We believe that EQT VI will position Vertu to continue to grow and lead in our marketplace," Oosting added.
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Finnish mobile maker, which has been witnessing a tough competition from rivals Samsung and Apple Inc in the smartphone category, said the deal is expected to close during the second half of the year.
EQT VI said Vertu fits well the firms investment strategy and plans to develop the brand as a standalone company.
"With its strong brand, undisputed category leadership and attractive growth outlook, Vertu fits well with EQT VI's investment strategy.
"EQT VI is excited about the opportunity to develop Vertu as a standalone company and plans to drive the development of the luxury mobile phone category through significant investments in retail expansion, marketing and product development," Investment Advisor to EQT VI Jan Stahlberg said.
In a separate announcement, Nokia today announced slashing of 10,000 jobs worldwide by end of 2013. Besides, it also made changes in senior management following the resignation of three officials including Chief Marketing Officer Jerri DeVard.